Family businesses are not spending enough time on succession planning, according to new research.

A study by accountancy firm Johnston Carmichael found 38 per cent of family-owned companies felt a period of two to five years was sufficient for a planned succession or change of ownership.

However, economic and operational risk were the major concerns with how to take the business forward to the next generation coming further down.

Andrew Shepherd, managing partner of Johnston Carmichael Edinburgh, said firms are not considering the future far enough in advance.

He said: "Retirement planning is just one part of succession as that is really just making sure the senior generation have an exit route out and do not have to rely on the business to sustain them.

"Succession planning can start from how you are training the younger generation to come in and take over the reigns so you can be talking 20 to 30 years.

"It comes into clearer focus by the time you are 45. By then you have got to be looking at who will take over in key positions and what skills there are.

"It gets more vital the nearer you get to it but businesses can't afford to leave it too late. One or a few years is certainly not enough."

The survey also found 69 per cent paid market rates even for family employees with 15 per cent saying all family members earned the same amount.

Shepherd also believes more firms need to benchmark, only 43 per cent of respondents did so, especially as funding is likely to be more difficult to access in the future.

He said: "Family businesses are going to have to toughen and sharpen as they are going to be in the most difficult trading conditions in years.

"If they are going to the bank for funding they are going to have work harder to get that. The banks are going to be more rigid on the covenants they impose on businesses and how they enforce those. So it is going to be more rigid."

The value of having an independent sounding board to discuss the company with is becoming increasingly important.

Shepherd added: "When you are at the coal face it can be hard to stand back and get an overview on some of the areas which are important.

"That is why an outside view can be crucial when times are getting tough.

"There are not many family businesses with non-exec directors."

Around 50 per cent of the private sector workforce in Scotland is employed in family businesses.